Incredible comeback on oil

WTI oil rally today after the better than expected NFP numbers out of the US. Even though the wages did not rise as expected, the jobs number was enough to send the main US stock indices rallying more than 1%. The rally also extended to oil and that is why we are seeing a green bullish engulfing candle on the daily chart of WTI. The rally took the price above the 61.00 level and above the 55 day EMA. In case of continuing rising, the price of WTI oil could reach the 64.00 level or the 65.00 level, area that could act as resistance. On the other hand, if the price drops back down for whatever reason, the 58.00 level could act once again as support, due to the fact that exactly at that level we have the 200 week EMA. Below the 58.00 level, the next support level could be the 200 day EMA, around the 56.00 level.

Descending wedge on the AUD/USD

The descending wedge is a bullish reversal pattern that forms in a consolidation area. On the daily chart of the AUD/USD we can see that the pair has been retracing from the peak at the 0.8123 until it consolidates around the 200 day EMA (blue line). For now, that EMA is acting as support. On the other hand, the 55 day EMA (purple line) has been acting lately as resistance. If the price breaks above the 55 day EMA, then it would be breaking above the wedge and the pair could break the 0.7900 level to go and visit the 0.8000. But in order for the AUD/USD to go back to its bullish trend, it must break above the peak at the 0.8123 level. To the downside, a breakdown below the 0.7700 could accelerate the bearish momentum and the AUD/USD could reach the 0.7600 level or even the 0.7500 level.

Possible bullish breakout on the USD/CAD

The USD/CAD has found a good resistance around the 1.3000 level as shown on the daily chart. The bullish trend is still in place according to the angle of inclination of the 55 day EMA (purple line). In fact, if the 55 day EMA manages to cross above the 200 day EMA (blue line), then we will have a golden cross, pattern that has bullish implications in the mid-term. The stochastic indicator is at the overbought zone, but it has formed what it appears to be an ascending triangle, which is telling us that the pressure is building up to the upside. Therefore, we could see a bullish breakout of the 1.3000 level. Above the 1.3000 level, its next resistance could be the 1.3200 level. To the downside, in case of a bearish pullback, its next support could be the 200 day EMA at the 1.2693 level, zone that was resistance in the past and now could become support.

The bullish momentum accelerates on gold

During last Thursday’s trading session the daily candle on gold closed as a hammer formation, which is a bullish reversal pattern. On the daily chart of gold we can see that the lower shadow of Thursday’s candle is relatively long, showing us that the buyers came into the market around the 1300 level and pushed the price higher. On the following sessions, the price of gold breaks above its 55 day EMA (purple line), around the 1320 level and today the bullish momentum accelerates. In case of continuing higher, gold may find some resistance around the 1350 level. Above that level, the peak at the 1366 level could also act as resistance. To the downside, the most relevant support area is between the 1300 level and the 200 day EMA (blue line) at the 1292 level.

Follow up on the EUR/USD

The EUR/USD on the daily chart is really in a wide range between the 1.2200 zone and the 1.2500 zone. This Monday’s daily candle has closed in the shape of a hammer, which is a bullish reversal pattern; therefore, the EUR/USD may try to head higher. To the upside, the pair may find some resistance on the 1.2400 level, but a better resistance could be the 1.2500 level along with the 1.2554 high. As we said, the pair is oscillating around the 1.2300 level where we can find the 200 month EMA without a clear trend. For now, the 55 day EMA (purple line) could act as a support along with the 1.2200 level. Below the 1.2200 zone, the next support levels could be any of the round number levels all the way down to the 1.1900 zone where we can find the 200 day EMA (blue line).

Analysis on silver

The price of silver has a very tight correlation with the price of gold. Both precious metals are affected by the Dollar, due to the fact that both are quoted in Dollars in the international markets. The same volatility that we have seen on the Dollar index is reflected on the price of silver. On the daily chart of silver we can see that the instrument fell to the 16.14 level, but it couldn’t reach the 16.00 level. On the chart we can also see a well-defined bearish trendline that has not been broken up to now and it is showing us that the bearish trend in the short term is still in place, despite the current pullback. However, if the price manages to break that trendline to the upside, then its 200 day EMA (blue line) may act as resistance, followed by the 17.00 level. Above the 17.00 level, its next resistance could be the peak at the 17.67 level. Below the 16.00 level, its next support could be the low at the 15.59 level.

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